Monday, Malaysian Prime Minister Najib Razak announced a liberalization plan for the financial services sector. Measures include raising foreign equity participation in investment banks and insurance companies to a limit of up to 70% from 49%.

The foreign equity limit for domestic commercial banks will remain at the current 30%.

To enhance operational flexibilities of foreign institutions operating in Malaysia, locally incorporated foreign commercial banks will be allowed to establish four new full-fledged branches with effect in 2010 and 10 microfinance branches with effect from this year.

Najib said these liberalization measures will be implemented over 2009 to 2012 and these steps are in line with the Government's initiative to promote structural change within the economy and diversify sources of growth to further drive economic expansion.

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